Latin America

The Issue

The United States has an abiding geopolitical interest in Latin America, an interest that derives from America’s close economic, cultural, and demographic ties. Though their security challenges do not rise to the level of threatening the national interest of the U.S., numerous destabilizing forces plague these regions, posing substantial hurdles to their economic development and political stability—which also affects U.S. interests.

Challenges aside, these areas also present great opportunities. The U.S. certainly remains engaged with the governments and peoples of the states of Latin America, but so, too, do competitors of the U.S.—rivals who seek to gain access to these regions’ markets and resources and, for good or ill, cultivate relationships that support competing security agendas. As the U.S. considers just how much it should invest in its national defense, it should remain mindful of these regions and the role that they play in geostrategic affairs.

Instability in Central America and Mexico Fuels Illegal Migration. Due to geographic proximity, high levels of trade, persistently growing demographic and cultural ties, and a lengthy history of diplomatic connections, the U.S. has strong links to, and strategic interests in, Latin America. Although regional security threats of the type that plague the Middle East and Africa, and major-threat actors like China, Iran, North Korea, and Russia are absent from Latin America, the U.S. still has a vested interest in the region’s economic and political stability.

Transnational organized crime continues to proliferate throughout Latin America, fueling violence, eroding the rule of law, and hindering economic development. While overall homicide rates have decreased around the world, this region has experienced a very different trend: Excluding anomalies like Chile and Costa Rica, the Central American and South American sub-regions are among the most dangerous in the world.

Successes in eradicating Colombian cartels and increased counter-crime initiatives in Mexico have pushed drug-trafficking organizations into Central America, where smaller and poorer governments are ill-equipped to deal with such violent entities. In addition, a resurgence of illicit smuggling routes in the Caribbean corridor has raised concerns about the future of U.S. maritime interdiction efforts.

Violence and associated criminality continue in Mexico’s ongoing drug war, affecting not only Mexico, but also the U.S., due to the cross-border trafficking of illicit drugs that links the Mexican cartels, transnational criminal organizations, and U.S.-based gangs. In many regions where police have failed, vigilante and militia groups have emerged—an attempt to restore order that only highlights the deficiencies of the central government. The recent expansion of synthetic opioids and precursor chemicals used in its production have become lucrative sources of revenue for Chinese and Mexican criminals. The expansion of Mexican-origin opioids has launched a full-scale opioid epidemic and devastated communities throughout the U.S., with an immeasurable human toll.

Mexico faces considerable security and rule-of-law challenges, which must be addressed. While President Enrique Peña Nieto’s efforts to curb violence throughout the country have not been very successful, his willingness to continue to work with U.S. law enforcement and intelligence counterparts bodes well for the future, as seen in Mexico’s renewed efforts to expand cooperation with the U.S. on regional challenges, such as the Central America crisis.

Unlawful immigration from Central America will continue to be a problem for U.S. policymakers. No longer do Mexicans constitute the majority of illegal migrants to the U.S. Currently, they are estimated to account for only about 25 percent of border crossers. The same cannot be said for the Northern Triangle countries of Central America.

Located directly below Mexico, the Northern Triangle region of Central America—Guatemala, El Salvador, and Honduras—are caught in the cross hairs of drug-trafficking organizations and the violent regional gangs that support them. The erosion of Colombia’s cartels and subsequent growth of their Mexican counterparts shifted drug-trafficking routes to the isthmus. The instability and weak governance capability of the Northern Triangle countries helped facilitate the violence and criminality associated with these organizations.

Venezuela’s Downward Spiral. The crisis in Venezuela has reached a critical juncture. Over the past two decades, the now-deceased Hugo Chavez and his handpicked successor, President Nicolas Maduro, have wreaked havoc in Venezuela. Socialist economic policies and government corruption have destroyed a once-thriving economy sitting on the world’s largest oil reserves. Adding to Venezuela’s economic crisis is its skyrocketing inflation rate. The International Monetary Fund estimates a 2016 inflation rate of 475 percent, an enormous increase from 2015’s already crushing rate of 275 percent. For 2017, the situation is estimated to become much worse, with a sharp rise of 1,660 percent. The capital city of Caracas is now the most dangerous non–war zone in the world, with 120 murders for every 100,000 residents each year. The deteriorating conditions and rampant shortages are most evident in the health care system,where shortages of medicine have rendered public hospitals useless. Venezuela has also emerged as a major regional and international drug-trafficking hub, with established networks throughout Central and South America, the Caribbean, and West Africa. Senior government officials, including former cabinet members, have been sanctioned by the U.S. government for being international drug traffickers and providing support to Colombia’s terrorist group, the Revolutionary Armed Forces of Colombia (FARC). Government officials have also been found to support members of regional and international terrorist groups.

On July 30, 2017, Venezuela became a modern-day dictatorship. Socialist strongman Nicolas Maduro held a fraudulent and highly unpopular election where each of the 545 hand-selected candidates of the National Socialist Party (PSUV) was appointed to a constituent assembly. This supranational group is set to rewrite Venezuela’s constitution, expel the opposition from the National Assembly, and consolidate all power in the executive branch.

Countering U.S. Influence. America’s geopolitical foes have, and will continue to, exploit the region’s proximity to the U.S. by seeking relationships with regional partners to counter U.S. influence. These foreign adversaries are finding receptive hosts within countries that view the U.S. as an ideological opponent, specifically the Bolivarian Alliance (ALBA) countries of Bolivia, Cuba, Ecuador, Nicaragua, and Venezuela.

One of America’s primary adversaries, Russia, is developing strategic regional partnerships in the form of military cooperation, arms sales, trade agreements, and even cooperation in counternarcotic operations. In addition to high-profile visits by the Russian Navy’s Interfleet Surface Action Group to Cuba, Nicaragua, and Venezuela, Russia used a regional exercise to deploy two long-range strategic bombers to Venezuela and Nicaragua in2015 and, following its annexation of Crimea, announced plans to build military bases in Cuba, Nicaragua, and Venezuela.

The People’s Republic of China (PRC) has been another active player in the region. Much of China’s engagement has focused on aggressively expanding bilateral economic relations and major investments in infrastructure development projects. Joint military exercises have largely been of a humanitarian nature, such as exercises with regional armed forces in which medical services are provided in rural villages. Panama’s recent decision to sever ties with Taiwan and establish relations with China, thus switching recognition from the Republic of China (ROC), Taiwan’s official name, over to the PRC, indicates that the PRC could be aggressively courting the remaining 11 Latin American countries recognizing the ROC.

Cuba’s Destabilizing Role in Latin America. The Castro regime in Cuba has long been stoking the fires of the Venezuela crisis. As the Western Hemisphere’s longest-reigning military dictatorship, the Cuban government has survived on the petro-dollars from its benefactors in Caracas. The relationship between Fidel Castro and Hugo Chavez helped reinvigorate the Cuban government’s Marxist anti-American ideology into what is now known as “21st-century socialism.” Via the socialist ALBA bloc, the government of Venezuela has spearheaded the unprecedented wave of anti-Americanism in Latin America. ALBA member countries have expelled U.S. diplomats, shut down U.S.-led counternarcotics programs, and hampered bilateral trade relations.

Under the Obama Administration, the move to unconditionally normalize relations without requiring that the Cuban government change its behavior has been a proven failure. While commercial openings marginally trickled down to Cuba’s nascent non-state sector, the grand beneficiary has been Cuba’s state-run industries, which own roughly 80 percent of Cuba’s economy, including the tourism and agriculture industries. Cuba is still promoting instability in Venezuela, continuing its alliances with U.S. adversaries, and repressing human rights. To date, Cuba has also not shown progress on compensating the 5,913 Americans for the $8 billion dollars seized by the Cuban government at the onset of Fidel Castro’s revolution.

Getting Colombia’s Peace Process Right. Right on Venezuela’s border is Colombia, a strong U.S. ally and the largest regional foreign aid recipient. The Colombian government is in the midst of implementing an ambitious peace deal reached with Colombia’s narco-terrorist organization FARC. Concessions granted to FARC during the peace deal in the form of scaling down countercrime and counternarcotic operations have resulted in a massive and rapid increase of coca cultivation. In 2016, 188,000 hectares of coca were cultivated, a sharp uptick from the 80,500 in 2013 and 112,000 in 2014. Implementing the peace process is expected to take several decades and will require substantial and continued U.S. support.

The U.S. must make sure the gains and successes of U.S. security and development program “Plan Colombia” are not lost. As a result of this bilateral cooperation, Colombia emerged from the brink of being a failed state as an economic and security success story. It is in the vital U.S. interest to ensure that these gains are not lost. The U.S. can do so by mitigating the weaknesses in the peace deal. For starters, FARC monetary assets were not itemized nor seized prior to ratification of the peace deal, yet FARC has been allowed to become a political party. This means that FARC will have an undeserved role in deciding Colombian policy. Insurgencies are often granted political roles as a means to reintegrate them back into society. The U.S. must urge Colombia to prevent illicit FARC money from corrupting the country’s political system.

Also, FARC objections to U.S. security assistance for Colombia are well documented and must not be allowed to influence bilateral relations. A further complication of the peace process is the creation of a transitional justice system that could result in de facto amnesty for certain FARC combatants. Although not explicitly stated in the text of the peace agreement, FARC has requested protection from U.S. extradition orders as well. U.S. policymakers should be highly skeptical of this.

Recommendations

Fill the Leadership Void in Latin America Left by the Obama Administration. The U.S., Mexico, and the Northern Triangle bloc have a shared responsibility in addressing the destabilizing factors in Central America. A successful peace-plan implementation is a U.S. national security interest, but even more important to Colombia and the region. If left unaddressed, the crisis in Venezuela will further destabilize South America in the form of refugee flows and safe havens for criminal and terrorist elements. Advancing the U.S. interest means working alongside regional partners to promote economic growth and citizen security.

Strengthen the U.S.–Mexican Relationship. Few things are more “America First” than having a friendly, prosperous, and secure neighbor on the U.S.’s southern border. From cooperation on transnational organized crime to migration and trade, Mexico is an invaluable partner for the U.S. Yet the relationship can grow stronger. From the quickly deteriorating situation in Venezuela to the crises in Central America, greater success will be found in a joint U.S.–Mexico effort. The North American Free Trade Agreement is in its 23rd year of existence and should be updated to include sectors that did not exist at the time of its signing. Barriers counterproductive to economic growth, such as burdensome environmental and labor regulations, should be reined in.

Support Central America’s Economic Development by Encouraging Economic Freedom. In The Heritage Foundation’s Index of Economic Freedom, which evaluates the economic freedom of countries throughout the world, the economies of El Salvador, Guatemala, and Honduras have room for improvement. While El Salvador and Guatemala are ranked “Moderately Free,” at 12th and 15th, respectively, of the 32 countries in the region, Honduras is ranked 21st and “Mostly Unfree.” Of the 186 countries measured worldwide, Honduras’s “Rule of Law” scores are amongst the lowest. Indicators factored include property rights ranked at 112th, judicial effectiveness at 108th, and government integrity at 126th. “Regulatory Efficiency” rankings, particularly in regard to business freedom and labor freedom, are quite low, at 136th and 180th, respectively. El Salvador and Guatemala register similar “Rule of Law” and “Regulatory Efficiency” rankings.

Develop a Framework for U.S.–Mexican Collaboration in Central America. Mexico’s shared 541-mile-long border with Guatemala puts the Northern Triangle security crisis directly at its doorstep. As such, the U.S. and Mexico have a shared interest and, in some cases, a shared responsibility, to achieve stability and security in the region. The factors causing high levels of insecurity, like transitional criminal organizations, are not confined within territorial borders. Additionally, shared problems like weak government institutions and socioeconomic disparities present a regional challenge. The respective governments should capitalize on natural areas of agreement.

Condition U.S. Support for “Peace Colombia” on Fixing the Flaws of the Peace Deal and Reducing the Cocaine Cultivation Boom. As the U.S.–Colombian relationship shifts from “Plan Colombia” to “Peace Colombia,” the U.S. must ensure the successes of the former are not lost. For the United States, both the terms of the peace agreement and the way it is implemented are extremely important. Colombia is a U.S. ally. It is also the largest recipient of U.S. foreign aid in the Western Hemisphere.

Maintain FARC’s Foreign Terrorist Organization Designation. Arguments for delisting in order for the U.S. to fund FARC demobilization are baseless. Demobilizing guerrillas is not the central component of the U.S.’s contribution to the peace process. Additionally, funding from other foreign donors not beholden to this restriction, such as the European Union and United Nations, will be available.

Intensify Efforts to Locate FARC Assets. In 2012, Colombian intelligence services estimated annual FARC drug-trafficking revenues to be around $3.5 billion, yet the location of FARC money and assets are largely unknown. Illicit money cannot remain in FARC control if the group intends on demobilizing and reintegrating into society.

Continue Anti-Narcotics Operations. U.S. policymakersmust ensure that ambiguities in the peace deal do not weaken existing efforts on bilateral counternarcotics or countercrime assistance. While FARC objections to U.S. security assistance for Colombia are well documented, they should be disregarded.

Develop a Comprehensive Venezuela Strategy. Nowhere in the Western Hemisphere does another such complex and multifaceted crisis exist. It is no longer a matter of when the situation will reach a breaking point, but rather how the multitude of issues facing the country will shape the inevitable implosion. U.S. policymakers must be proactive and prepare for all possible scenarios. Immediate plans must be made to mitigate mass migration, curtail the spread of disease, and alleviate the internal humanitarian crisis. U.S. efforts must include addressing the underlying causes of Venezuela’s demise, the ongoing political crisis. Part of this must involve demanding the unconditional release of Joshua Holt, the U.S. citizen unjustly imprisoned in Venezuela.

Send a Clear Message of Support to Venezuela’s Democratic Opposition. U.S. policymakers must respond to the deteriorating situation in Venezuela. Moreover, regional leaders and stakeholders must encourage Caracas to respond effectively to the humanitarian crisis. The Venezuelan government’s deep-seated corruption and criminality threaten both hemispheric stability and America’s national interests. America should continue to call for the unconditional release of Venezuela’s political prisoners.

Refuse to Recognize the Unlawfully Elected Constituent Assembly of July 30, 2017. The constituent assembly will radically alter the future of Venezuela and turn the country into a regional pariah state. The PSUV has been granted the power to rewrite the constitution and remove from power the National Assembly and Attorney General’s office, the only institutions controlled by the opposition. Transforming other agencies falls under the PSUV’s authority as well. The U.S. should interpret this move as a direct challenge to its own national security interests.

Develop a Comprehensive Sanctions Regime Targeting the Leaders and Fomenters of Violence and Destruction of Democracy. The U.S. should enact targeted sanctions against Venezuelan government officials who have been accused of egregious corruption, violence against the opposition, and degradation of their country’s democracy.

Build a Coalition of Countries to Address the Venezuelan Crisis. The country’s imminent collapse will have far-reaching implications for the region. In addition to a refugee crisis, a spread of communicable diseases will be unavoidable. Moreover, regional criminal organizations, such as Colombia’s FARC, are sure to exploit the power vacuum.

Base Cuba Policy on Ending the Castro Regime by Supporting the Democratic Opposition. For two years, the U.S.’s policy toward the Castro regime has been one of unilateral concessions at the expense of U.S. interests and the Cuban people. The Trump Administration’s recent rollback of parts of the Obama Administration’s Cuba policy is a step in the right direction. Moving forward, the bilateral relationship must be reciprocal, and in recognition of the fact that Cuba continues to be controlled by the Western Hemisphere’s longest governing military dictatorship. Cuba must be asked to show demonstrable progress in the following areas within a determined period of time, not to exceed a year:

Return of the dozens of U.S. fugitives, including FBI wanted terrorist and convicted cop murderer Joanne Chesimard and Puerto Rican terrorist William Morales;

Compensation or return of illegally seized American property;

Protection of basic human rights, such as religious belief, freedom of speech, political affiliation, and activities; and

Withdrawal of its occupational forces from Venezuela, and their support in alleviating the crisis.

If the Castro regime does not comply, U.S. policymakers should consider the tools at their disposal, such as

Rescinding the Obama-era regulation allowing U.S. citizens to send remittances to Cuban government officials;

Bringing back the Cuban Medical Parole Program, which allowed Cuban medical professionals forcibly sent abroad by the Cuban government to seek asylum in the U.S.; and

Exploring the possibility of putting Cuba back on the “State Sponsors of Terrorism” list.

Provide Material Support to Cuba’s Democratic Opposition. America must remain a long-term partner to the Cuban people. To do this, the U.S. must support the political, social, and economic change elements on the island. Under the Obama Administration, U.S.-funded programs became tools to further the Cuba normalization gambit. The programs should return to their original purpose, ending the Castro regime and preparing Cubans for a post-Castro Cuba.

Facts and Figures

FACT: For the first time, Venezuela is now the leading country for asylum requests to the United States, with nearly 15,000 applications in fiscal year 2017.

In Venezuela, the International Monetary Fund estimates a 2016 inflation rate of 475 percent, an enormous increase from 2015’s already crushing rate of 275 percent. For 2017, the situation is estimated to become much worse, with a sharp rise of 1,660 percent.

The capital city of Caracas is now the most dangerous non–war zone in the world, with 120 murders for every 100,000 residentseach year.

Venezuelans live in fear knowing that they are more likely to be kidnapped in their country than are the citizens of Afghanistan, Colombia, Iraq, Lebanon, or Syria.

FACT: Latin America is the most violent region in the world, with the three countries in Central America’s Northern Triangle registering in the top ten and El Salvador being in the top spot.

For every 100,000 citizens, 81 are murdered in El Salvador, 59 in Honduras, and 27 in Guatemala every year. In comparison, the U.S. registers at 4.5 per 100,000 every year.

After Mexico, the largest numbers of illegal migrants to the U.S. come from the Northern Triangle.

FACT: Cuba has a long history of failing to repay its debts.

Despite being close Cold War allies, Russia was forced to waive more than $35 billion of Cuba’s debt.

Mexico waived almost $500 million, and Cuba still owes the Paris Club $15 billion, in addition to the $8 billion owed to Americans.

Cuba has repeatedly demonstrated that it negotiates in bad faith, and policymakers should maintain the embargo and support.